Singapore's digital economy fell from $12 billion in Gross Merchandise Value (GMV) in 2019 to $9 billion in 2020.

According to an annual report from e-Conomy SEA 2020 -- a multi-year research program launched by Google, Temasek, and Bain & Company -- this decline was due to a roughly 70 per cent fall in the GMV of online travel, year-on-year from 2019 to 2020.

The digital economy defined in the report consists of five sectors: e-commerce, transport and food, online media, financial services, and online travel.

E-commerce growing in Singapore

The report estimates the size of the digital economy by looking at the GMV, which is the total sales of goods and services through digital platforms.

Aadarsh Baijal, head of digital practice in Southeast Asia at Bain, said in a media sharing on Tuesday, Nov. 10, that about 50 per cent of the digital economy in 2019 was online travel.

However, he added that the digital economy was becoming more diversified.

According to the report, the Singapore digital economy grew 20 per cent, if online travel is excluded.

These figures are in large part due to the pandemic restricting people from travelling, and the lockdown, which pushed people to buy more things online.

Singaporeans reported that they engaged in e-commerce activities 1.8 times more during the Covid-19 lockdown than before, and continues to use it 1.2 times more after the lockdown.

Baijal said: "[E-commerce] is expected to grow, so I think it is worth mentioning, over the next couple of years, we expect that to be the largest sector for Singapore and some of the other markets as well."

The report also estimated that roughly 30 per cent of all digital consumers were purchasing goods and services through a digital platform for the first time.

The panel said that there were no estimates for last year as it was a new question included in this year's survey.

However, Stephanie Davis, Vice President of Google Southeast Asia, clarified that half of the digital economy in Southeast Asia last year were not consumed through digital platforms yet.

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Top image from Unsplash.